AVAX has fallen to the January 2021 level after an analyst pointed out that the last drop in price was a market manipulation, which was directed to wipe out the leverage below the $7 level.
AVAX forced manipulated into wiping out leverage
AVAX which is currently trading at $6.78, is at the 2021 January levels after market makers forced and manipulated the price to wipe out leverage below the $7 level. Analyst and trader Vuori observed this market manipulation and explained it in the post.
Despite AVAX crashing to this low level, the analyst still thinks that as long as the AVAX market cap, which is currently at $2.92 billion, holds above the $2.1 billion, there was always a possible for the market to increase by 20X or 30X under moderate market conditions.
However, according to Santiments, an onchain tool, discussions around Avalanche’s AVAX token have recently focused on both short-term trader behavior and longer-term tokenomics concerns, as market participants evaluate whether the asset can sustain its current performance.
A notable trend among traders has been the public sharing of realized profits and structured take-profit milestones, reflecting a more disciplined approach to locking in gains after periods of volatility. This behavior often signals a maturing market environment, where participants are increasingly focused on risk management rather than purely speculative holding.
At the same time, attention has turned toward the token’s supply dynamics. A key concern involves large periodic token releases, estimated at around 1.6 million AVAX every three months, originating from foundation allocations, Avalanche Consensus Program (ACP) distributions, and DAT-related accumulations. These scheduled releases introduce a predictable but significant inflow of tokens into circulating supply, which can influence market sentiment.
From a tokenomics perspective, such unlocks do not inherently imply negative price action, but they do introduce the possibility of dilution if newly released tokens are sold into the open market.
Traders and investors fear about the prices with the token unlocks
Traders and investors often monitor these events closely because they can temporarily increase selling pressure, especially in environments where demand is not strong enough to absorb the additional supply. In some cases, expectations of future unlocks are already priced in, but uncertainty around actual distribution behavior can still create caution among market participants.
Despite these concerns, supporters of Avalanche argue that the ecosystem growth, institutional participation, and increasing on-chain activity may help offset dilution effects over time. If demand continues to expand alongside supply emissions, the impact of periodic releases could be absorbed more efficiently.
